SEC Form N-CSRS filed by Ares Dynamic Credit Allocation Fund Inc.

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number: 811-22535

 

 

ARES DYNAMIC CREDIT ALLOCATION FUND, INC. 

(Exact name of registrant as specified in charter)

 

1800 AVENUE OF THE STARS

SUITE 1400

LOS ANGELES, CALIFORNIA 90067 

(Address of principal executive offices)(Zip code)

 

(Name and Address of Agent for Service)		Copy to:
Ian Fitzgerald 1800 Avenue of the Stars, Suite 1400 Los Angeles, California 90067		P. Jay Spinola, Esq. Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019

 

Registrant’s telephone number, including area code: (310) 201-4100

 

Date of fiscal year end: December 31

 

Date of reporting period: June 30, 2025

 

 

 

 

Item 1. Report to Stockholders.

 

(a)        Report to Stockholders is attached herewith.

 

 

Ares Dynamic Credit Allocation Fund, Inc.

(NYSE: ARDC)

Semi-Annual Report

June 30, 2025

Ares Dynamic Credit Allocation Fund, Inc.

Contents

Letter to Shareholders					1
Fund Profile & Financial Data					4
Schedule of Investments					6
Statement of Assets and Liabilities					16
Statement of Operations					17
Statements of Changes in Net Assets					18
Statement of Cash Flows					19
Financial Highlights					20
Notes to Financial Statements					23
Proxy & Portfolio Information					44
Dividend Reinvestment Plan					45
Corporate Information					46
Privacy Notice					47
Directors and Officers					48

Ares Dynamic Credit Allocation Fund, Inc.

Letter to Shareholders

As of June 30, 2025

Dear Shareholders,

We want to thank you for your support of the Ares Dynamic Credit Allocation Fund, Inc. ("ARDC" or the "Fund"), and we appreciate the trust and confidence that you have placed in us.

Throughout the first half of 2025, the ARDC investment team sought to position the Fund to benefit from the evolving macro and geopolitical conditions while appropriately managing credit risk. This letter provides a recap of the market environment, details surrounding our active portfolio management strategy and the opportunities ahead for ARDC.

Economic Conditions and Market Update

In the first half of 2025, the U.S. economy delivered positive but more tempered GDP growth relative to 2024¹​. Although inflation was also relatively stable during this period, additional tariffs may pose increased inflationary risks going forward. Reflecting this dynamic, the year-over-year growth in core PCE, the Federal Reserve's preferred inflation measure, came in at 2.8% in June 2025²​. While slightly above the Federal Reserve's 2% long-run target, June's reading exhibited stability, falling in the monthly range of 2.6% - 2.8% during the first half of 2025 and in line with the 12-month average of 2.8%²​. During the first half of 2025, the unemployment rate held steady at 4.1%³​, consistent with the 4.0 - 4.2% range seen over the past fourteen months³​, while the growth in nonfarm payrolls slowed.⁴​

Forward guidance on monetary policy provided by the Federal Reserve reflects a measured approach for the remainder of the year. The Federal Reserve's latest dot plot signals one to two 25-basis-point cuts in 2025, aligning with the expectations set in December 2024. This stability suggests that policymakers are open to easing monetary policy, although future action will be contingent on inflation trends, labor market data and broader economic conditions.⁵​

Throughout the first half of 2025, heathy levels of earnings growth, capital markets activity and generally stable macroeconomic conditions supported overall corporate credit performance and positive returns for leverage credit. As measured by the S&P 500 Index, corporate earnings increased an estimated 11.5% and 5.4% year-over-year in the first and second quarters of 2025, respectively.⁶​

Low default rates across high yield bonds, leveraged loans and CLOs helped sustain positive returns in the first half of 2025. High yield bond and leveraged loan default rates remained in the range of 1% - 3%, consistent with both 2024 default levels and the historical long-term default rate for these leveraged credit asset classes. Specifically, the trailing 12-month default rate for leverage loans decreased from 3.4% at year-end 2024 to 2.8% at June 30, 2025. ⁷​ High yield bonds also demonstrated strong credit performance in the first half of 2025 with a trailing 12-month default rate that declined from 1.50% in December 2024 to 1.14% in June 2025.⁸​ Finally, just 0.4% of CLO assets held were in default, well below the leverage loan and high yield bond 12-month averages at June 30, 2025.⁹​

Supported by overall strong credit performance, leveraged credit, which includes leveraged loans, high yield bonds and CLOs, all posted positive returns year-to-date. High yield bonds and leveraged loans generated total returns of 4.6%¹⁰​ and 3.0%¹¹​, respectively, with AAA through BB rated CLO debt returning 3.0% - 4.5% during the first half of 2025.¹²​

Against this economic and capital markets backdrop and the potential for easing monetary policy in the future, overall yields for credit asset broadly were stable or declined in the first half of 2025. Specifically, leverage loan yields declined from 8.5% at year-end 2024 to 8.2% at mid-year 2025, while high yield bond yields, which are mostly fixed rate, were stable from 6.7% at year-end 2024 to 6.7% at mid-year 2025.¹³​

As we enter the second half of 2025, we believe our established credit capabilities and dynamic allocation strategy enable us to proactively manage risk and identify relative value opportunities created by changes in sentiment on rates, economic growth and idiosyncratic credit situations. As part of Ares Management Corporation's ("Ares") scaled, global platform, we believe we benefit from broad market intelligence across Ares' various product offerings. We remain committed to leveraging these advantages to make disciplined investment decisions, particularly as we continue to monitor developments in monetary policy, global trade dynamics and ongoing geopolitical events that may influence market conditions.

Portfolio Positioning and Performance

We believe ARDC delivered strong investment and credit performance during the first half of 2025.

Given the growing prospects for declines in short-term rates, we modestly extended duration of the Fund by reducing floating rate CLO debt and increasing fixed rate high yield bond investments.

Ares Dynamic Credit Allocation Fund, Inc.

Letter to Shareholders (continued)

As of June 30, 2025

Driven by our view of relative value in the first half of 2025, we increased the Fund's high yield bond allocation from 31% of the portfolio at year-end 2024 to approximately 34% at June 30, 2025, and reduced the Fund's exposure to CLO debt security from 18% at year-end 2024 to 16% at mid-year 2025. While overall we remain constructive on CLO debt investments, we became more selective in CLO debt as yields tightened and paired back our allocation to BB rated CLO debt securities in the portfolio. Spread compression on CLO debt has created compelling near-term opportunities to maintain our allocation to CLO equity,¹⁴​ which we believe will benefit from high cash-on-cash yields, well-priced locked-up liabilities and long reinvestment periods that enable the manager to take advantage of loan market volatility. Our overall portfolio allocation to leveraged loans and CLO equity remained consistent with year-end 2024 levels at 39% and 13%, respectively, as compared to June 30, 2025.

Our asset class, industry, and security selection continued to show positive results for our investors compared to high yield bond and leverage loan benchmarks. The high yield bond portion of the portfolio generated approximately 40 basis points higher total return as compared to the ICE BofA High Yield Constrained Index ("HUC0") during the first half of 2025, while the portfolio's leveraged loan investments generated 70 basis points higher total returns than the S&P LLI in the same period.

We believe ARDC's portfolio is well positioned in part due to its diversification.¹⁵​ Reflecting our focus on risk management, our portfolio is diversified across 256 issuers and 23 industries. The average position size across ARDC is 0.3% and the largest position is 1.2%.¹⁶​ ARDC's effective duration of 1.4 years was approximately half of the high yield index on June 30, 2025, which reflects our focus on maintaining low interest rate risk in the Fund.

Our disciplined approach to credit selection and portfolio allocation have enabled the Fund to deliver attractive NAV-based total returns. Specifically, in the first half of 2025 and over the last 12 months, ARDC's NAV-based total returns of 3.6% and 8.8%, respectively, compared favorably to our peer set median of 3.2% and 8.2% for the same time periods.¹⁷​ Since its inception, as well as over the past three and five years ended June 30, 2025, ARDC has outperformed the peer set median on both stock-based total returns and portfolio net investment total returns.¹⁸​

Looking Ahead

As we look further into 2025, we remain fairly constructive on continued economic expansion. Given downside risks have recently become marginally more pronounced, we will continue to assess interest rates alongside the macro impacts of evolving trade policies and potential regulatory reform. We believe ARDC is well-equipped to navigate periods of uneven economic growth should they develop given the strengths of the Ares platform, which includes our experienced portfolio managers and quantitative risk team. We also maintain a conservative balance sheet posture with a low leverage profile, which enables us to actively and tactically rotate the portfolio among asset classes, sectors and specific credits. It remains our objective to continue to deliver compelling returns to our investors primarily through attractive monthly dividends.

We appreciate the trust and confidence you have demonstrated in Ares through your investment in ARDC.

Best Regards,

Ares Capital Management II LLC

Ares Dynamic Credit Allocation Fund, Inc.

ARDC is a closed-end fund that trades on the New York Stock Exchange under the symbol "ARDC" and is externally managed by Ares Capital Management II LLC (the "Adviser"), a subsidiary of Ares Management Corporation. ARDC's investment objective is to provide an attractive level of total return, primarily through current income and, secondarily, through capital appreciation by investing in a broad, dynamically-managed portfolio of below investment grade senior secured loans, high yield corporate bonds and collateralized loan obligation securities. Thank you again for your continued support of ARDC. If you have any questions about the Fund, please call 1-877-855-3434, or visit the Fund's website at www.arespublicfunds.com.

Ares Dynamic Credit Allocation Fund, Inc.

Letter to Shareholders (continued)

As of June 30, 2025

Note: The opinions of the Adviser expressed herein are subject to change without notice. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed. This communication is distributed for informational purposes only and should not be considered investment advice or an offer of any security for sale. This material may contain "forward-looking" information that is not purely historical in nature. No representations are made as to the accuracy of such information or that such information will be realized. Actual events or conditions are unlikely to be consistent with, and may differ materially from, those assumed. Past performance is not indicative of future results. Ares does not undertake any obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise, except as required by law.

Indices are provided for illustrative purposes only and not indicative of any investment. They have not been selected to represent appropriate benchmarks or targets for ARDC. Rather, the indices shown are provided solely to illustrate the performance of well-known and widely recognized indices. Any comparisons herein of the investment performance of ARDC to an index are qualified as follows: (i) the volatility of such index will likely be materially different from that of ARDC; (ii) such index will, in many cases, employ different investment guidelines and criteria than ARDC and, therefore, holdings in ARDC will differ significantly from holdings of the securities that comprise such index and ARDC may invest in different asset classes altogether from the illustrative index, which may materially impact the performance of ARDC relative to the index; and (iii) the performance of such index is disclosed solely to allow for comparison on ARDC's performance to that of a well-known index. Comparisons to indices have limitations because indices have risk profiles, volatility, asset composition and other material characteristics that will differ from ARDC. The indices do not reflect the deduction of fees or expenses. You cannot invest directly in an index. No representation is being made as to the risk profile of any benchmark or index relative to the risk profile of ARDC. There can be no assurance that the future performance of any specific investment, or product will be profitable, equal any corresponding indicated historical performance, or be suitable for a portfolio.

This may contain information sourced from Bank of America, used with permission. Bank of America's Global Research division's fixed income index platform is licensing the ICE BofA Indices and related data "as is," makes no warranties regarding same, does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the ICE BofA Indices or any data included in, related to, or derived therefrom, assumes no liability in connection with their use and does not sponsor, endorse, or recommend Ares, or any of its products or services.

The ICE BofA US High Yield Index ("H0A0") tracks the performance of US dollar denominated below investment grade corporate debt publicly issued in the US domestic market. Qualifying securities must have a below investment grade rating (based on an average of Moody's, S&P and Fitch), at least 18 months to final maturity at the time of issuance, at least one-year remaining term to final maturity as of the rebalancing date, a fixed coupon schedule and a minimum amount outstanding of $100 million. Index constituents are capitalization-weighted based on their current amount outstanding times the market price plus accrued interest. Accrued interest is calculated assuming next-day settlement. Cash flows from bond payments that are received during the month are retained in the index until the end of the month and then are removed as part of the rebalancing. Cash does not earn any reinvestment income while it is held in the index. The index is rebalanced on the last calendar day of the month, based on information available up to and including the third business day before the last business day of the month. No changes are made to constituent holdings other than on month end rebalancing dates. Inception date: August 31, 1986.

The Credit Suisse Institutional Leveraged Loan Index ("CSLLI") is designed to mirror the investable universe of the $US-denominated leveraged loan market. The index inception is January 1992. The index frequency is daily, weekly and monthly. New loans are added to the index on their effective date if they qualify according to the following criteria: 1) Loan facilities must be rated "5B" or lower. That is, the highest Moody's/S&P ratings are Baa1/BB+ or Ba1/BBB+. If unrated, the initial spread level must be Libor plus 125 basis points or higher. 2) Only fully-funded term loan facilities are included. 3) The tenor must be at least one year. 4) Issuers must be domiciled in developed countries; issuers from developing countries are excluded.

The Standard & Poor's 500, often abbreviated as the S&P 500, or just "the S&P", is an American stock market index based on the market capitalizations of500 large companies having common stock listed on the NYSE or NASDAQ. The S&P 500 index components and their weightings are determined by S&P Dow Jones Indices.

REF: TC- 04458

¹​ Summary of Economic Projections, December 18, 2024 and June 18, 2025.

²​ U.S. Bureau of Economic Analysis, Personal Consumption Expenditures Excluding Food and Energy, July 18, 2025.

³​ U.S. Bureau of Labor Statistics, The Employment Situation — June 2025, July 3, 2025

⁴​ U.S. Bureau of Economic Analysis, Personal Income and Outlays — June 2025, July 31, 2025.

⁵​ Board of Governors of the Federal Reserve System, "Summary of Economic Projections", June 18, 2025.

⁶​ Yardeni S&P 500 Earnings Forecast, July 25, 2025.

⁷​ UBS "December US/EU Credit Default Analysis: Recapping 2024", January 7, 2025. Par default rate. Historical average of monthly default rates calculated on a last-twelve-month basis.

⁸​ J.P. Morgan Default Monitor, July 1, 2025. Represents the par weighted default rate for the respective asset classes.

⁹​ BofA Global Research, "BAML CLO Factbook," with data from Bloomberg, Indexes as of July 25, 2025.

¹⁰​ Measured by the ICE BofA High Yield Master II Index ("H0A0").

¹¹​ Measured by the Credit Suisse Leveraged Loan Index ("CSLLI").

¹²​ BofA Global Research, "BAML CLO Factbook," with data from Bloomberg, Indexes as of July 25, 2025.

¹³​ Measured by yields on B1 securities in the Credit Suisse Leveraged Loan Index ("CSLLI") and ICE BofA High Yield Constrained Index ("HUC0").

¹⁴​ BofA Global Research, "BAML CLO Factbook," as of July 25, 2025.

¹⁵​ Diversification does not assure profit or protect against loss.

¹⁶​ As of June 30, 2025. Diversification does not assure profit or protect against market loss.

¹⁷​ Market price-based total returns reflect annualized stock-based total returns assuming dividend reinvestment. Peer set includes the following closed end funds: ACP, AIF, BGB, BGH, DHF, DSU, EIC, GHY, HNW, KIO and XFLT. Past performance is not indicative of future results.

¹⁸​ Net investment total returns reflect annualized NAV-based total returns assuming dividend reinvestment. Peer set includes the following closed end funds: ACP, AIF, BGB, BGH, DHF, DSU, EIC, GHY, HNW, KIO and XFLT. Past performance is not indicative of future results.

Ares Dynamic Credit Allocation Fund, Inc.

Fund Profile & Financial Data

June 2025

Seeks attractive risk-adjusted total returns with a focus on high current income and an opportunity for capital appreciation.

Fund Highlights as of 6.30.25

Distribution Rate1​				9.49%
Managed Assets2​				$556m
Weighted Average Coupon				7.98%

1 Dividend per share annualized and divided by the June 30, 2025 market price per share. The distribution rate alone is not indicative of Fund performance.

2 Total assets of the Fund (including any assets attributable to financial leverage) minus accrued liabilities (other than debt representing financial leverage).

Ares Credit Group as of 6.30.25

AUM**				$377 billion
Credit Investment Team				545+
Portfolio Companies				~4,000

**AUM amounts include funds managed by Ivy Hill Asset Management, L.P., a wholly owned portfolio company of Ares Capital Corporation and registered investment adviser. Past performance is not indicative of future results. As of June 30, 2025, employees of Ares Management owned approximately 4.6% of the Fund's outstanding shares.

Investment Approach

_● Dynamically allocates across investment opportunities primarily in high yield bonds, senior loans and CLO securities

_● Designed to navigate evolving market conditions through deep fundamental credit analysis and in-depth due diligence

_● Tenured team with 20+ year track record benefits from the market intelligence, relationships and resources of the Ares platform

Current Portfolio Mix as of 6.30.25

61.0% Floating Rate³​

3 Calculated as a percentage of debt securities only.

This data is subject to change on a daily basis. As of 6.30.25, the Fund held a negative traded cash balance of -1.5%.

Fund Overview and Characteristics as of 6.30.25

Ticker				ARDC
Market/Share				$14.22
NAV/Share				$14.58
Monthly Dividend				$0.1125
Number of Issuers				256
Number of Instruments				300
Average Position Size				0.33%
Weighted Average Loan YTM4​				6.97%
Weighted Average Bond YTM5​				6.41%
Weighted Average CLO YTM6​				10.31%
Effective Duration7​				1.36
Month-End Leverage8​				37.46%
Asset Coverage9​				5.14
Preferred Stock Asset Coverage10​				2.67
Expense Ratio11​				5.27%
Excess Taxable Income12​				$15.5 million
Inception Date				11/27/2012
Common Shares Outstanding				23.9 million
NAV Ticker				XADCX
CUSIP				04014F102

4  The weighted-average gross yield to maturity on the pool of loans.

5  The weighted-average gross yield to maturity on the pool of bonds.

6  The weighted-average gross yield to maturity on the pool of CLO debt securities.

7  The effective duration measures a bond's sensitivity to interest rates.

8  As a percentage of total managed assets. The Fund utilizes leverage as part of its investment strategy and currently has borrowings under a credit facility as well as mandatory redeemable preferred shares. The Fund's leverage under the credit facility without the use of mandatory redeemable preferred shares was 19.47%.

9  Calculated pursuant to the Investment Company Act of 1940. Represents the ratio of the total assets of the Fund, less all liabilities and indebtedness not represented by senior securities, divided by total senior securities outstanding. The Fund has $108 million aggregate principal outstanding on a $212 million revolving funding facility with an institutional lender, pursuant to which the Fund expects to borrow funds to make additional investments, subject to available borrowing base and leverage limitations.

10  Calculated pursuant to the Investment Company Act of 1940. Represents the ratio of the total assets of the Fund, less all liabilities and indebtedness not represented by senior securities, divided by sum of total outstanding debt and aggregate value of the involuntary liquidation preference of the preferred stock of $100 million.

11  Represents the ratio of annualized expenses, inclusive of interest expense and amortization of debt issuance, to net assets for the period ended June 30, 2025.

12  Represents the estimated excess taxable income from the year ended 2024 for distribution to stockholders in 2025. Based on the number of shares outstanding at 12/31/2024.

Performance as of 6.30.25

				Year to Date				3 Years				5 Years				Since Inception*
ARDC NAV					3.63	%			12.07	%			9.47	%			5.93	%
ARDC Market					-1.30	%			16.40	%			13.63	%			6.18	%

*Since Inception of fund (11/27/2012).
Source: Ares

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. The NAV total return takes into account the Fund's total annual expenses and does not reflect transaction charges. If transaction charges were reflected, NAV total return would be reduced. Since Inception returns assume a purchase of common shares at the initial offering price of $20.00 per share for market price returns or initial net asset value (NAV) of $19.10 per share for NAV returns. Returns for periods of less than one year are not annualized. All distributions are assumed to be reinvested either in accordance with the dividend reinvestment plan (DRIP) for market price returns or NAV for NAV returns.

www.arespublicfunds.com

Not FDIC-Insured. Not Bank Guaranteed, May Lose Value

Ares Dynamic Credit Allocation Fund, Inc.

Fund Profile & Financial Data (continued)

June 2025

Investment Strategy

The Fund invests primarily in a broad, dynamically managed portfolio of (i) senior secured loans ("Senior Loans") made primarily to companies whose debt is rated below investment grade; (ii) corporate bonds ("Corporate Bonds") that are primarily high yield issues rated below investment grade; (iii) other fixed-income instruments of a similar nature that may be represented by derivatives; and (iv) securities of collateralized loan obligations ("CLOs") and other asset-backed issuers. The Fund utilizes leverage as part of its investment strategy and may incur leverage in an aggregate amount of up to 33 1/3% of the Fund's Managed Assets by borrowing under a credit facility. Ares Capital Management II LLC, the Fund's investment adviser (the "Adviser"), is an affiliate of Ares Management Corporation ("Ares"). The Adviser will seek to implement the Fund's investment strategy through the application of several techniques, including: (i) investing in a diversified portfolio of loans and other debt investments across a broad range of industries with varying characteristics and return profiles; (ii) adhering to the established credit underwriting processes of Ares and doing substantial pre-investment credit analysis, utilizing publicly available credit and industry information as well as other information about the borrowers and issuers; (iii) monitoring the credit quality of the obligors in the Fund's investments and, as appropriate, on a risk adjusted return basis, selling investments in underperforming issuers; and (iv) holding cash and engaging in derivative credit and interest rate hedges. The Adviser will allocate the Fund's portfolio dynamically among investments in the various targeted credit markets to seek to manage interest rate and credit risk and the duration of the Fund's portfolio.

Top 10 Holdings¹⁴​ as of 6.30.25

ATRM 14					1.20	%
TransMontaigne					0.97	%
Sprint					0.97	%
Ford Motor Credit Company					0.93	%
Subcom					0.93	%
Williams Cos Inc/The					0.88	%
Lumen Technologies					0.86	%
Freeport LNG Investments, LLLP					0.85	%
Caliber Collision					0.84	%
Crown Holdings, Inc.					0.82	%

14 Market value percentage may represent multiple instruments by the named issuer and/or multiple issuers being consolidated to the extent they are owned by the same parent company. These values may be different than the issuer concentrations in certain regulatory filings.

Industry Allocation¹²​ as of 6.30.25

12 Credit Suisse industry classifications weighted by market value. These values may be different than industry classifications in certain regulatory filings.

Ratings Distribution¹³​ as of 6.30.25

13 Based on S&P and/or Moody's rating. Credit quality is an assessment of the credit worthiness of an issuer of a security. AAA is the highest rating, meaning the obligor's capacity to meet its financial commitments is strong. As ratings decrease, the obligor is considered more speculative by market participants. Credit ratings apply only to the bonds and preferred securities in the portfolio and not to the shares of the fund which are not rated and will fluctuate in value.

This data is subject to change on a daily basis. As of 6.30.25, the Fund held a negative traded cash balance of -1.5%.

Ares Dynamic Credit Allocation Fund, Inc.

Schedule of Investments

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans 62.1%^(b)(c)(d)​

				Principal Amount(a)​				Value(a)​
Automobiles and Components 2.8%
Clarios Global, LP, 1st Lien Term Loan, 1M SOFR + 2.50%, 6.83%, 05/06/2030				$	2,791			$	2,781
LTI Holdings, Inc., 1st Lien Term Loan, 1M SOFR + 4.25%, 8.58%, 07/29/2029					2,918				2,915
Wand NewCo 3, Inc., 1st Lien Term Loan, 1M SOFR + 2.50%, 6.83%, 01/30/2031					4,108				4,087
									9,783
Capital Goods 12.1%
AI Aqua Merger Sub, Inc., 1st Lien Term Loan, 1M SOFR + 3.00%, 7.32%, 07/31/2028					4,489				4,479
Alliance Laundry Systems, LLC, 1st Lien Term Loan, 1M SOFR + 2.50%, 6.83%, 08/19/2031					4,339				4,345
Brown Group Holding, LLC, 1st Lien Term Loan, 3M SOFR + 2.50%, 6.78%, 07/01/2031					2,000				2,002
Crown Subsea Communications Holding, Inc., 1st Lien Term Loan, 3M SOFR + 4.00%, 8.33%, 01/30/2031					5,090				5,118
Kaman Corp., 1st Lien Delay Draw Term Loan, 02/26/2032(h)​					—				—
Kaman Corp., 1st Lien Term Loan, 3M SOFR + 2.75%, 7.03%, 02/26/2032					2,284				2,281
KKR Apple Bidco, LLC, 1st Lien Term Loan, 1M SOFR + 2.50%, 6.83%, 09/23/2031					2,494				2,487
Kodiak Building Partners, Inc., 1st Lien Term Loan, 3M SOFR + 3.75%, 8.03%, 12/04/2031					3,491				3,359
Madison IAQ, LLC, 1st Lien Term Loan, 3M SOFR + 3.25%, 7.51%, 05/06/2032					3,500				3,507
Pike Corp., 1st Lien Term Loan, 1M SOFR + 3.00%, 7.44%, 01/21/2028					2,779				2,793
TransDigm, Inc., 1st Lien Term Loan, 3M SOFR + 2.50%, 6.80%, 02/28/2031					3,459				3,465
TransDigm, Inc., 1st Lien Term Loan, 3M SOFR + 2.75%, 7.05%, 08/24/2028					495				497
Traverse Midstream Partners, LLC, 1st Lien Term Loan, 3M SOFR + 3.00%, 7.28%, 02/16/2028					2,747				2,751
White Cap Supply Holdings, LLC, 1st Lien Term Loan, 1M SOFR + 3.25%, 7.58%, 10/19/2029					2,985				2,964
Wilsonart, LLC, 1st Lien Term Loan, 3M SOFR + 4.25%, 8.55%, 08/05/2031					1,985				1,952
									42,000

Senior Loans^(b)(c)(d)​ (continued)

				Principal Amount(a)​				Value(a)​
Commercial and Professional Services 2.0%
GFL Environmental Services, Inc., 1st Lien Term Loan (Canada), 3M SOFR + 2.50%, 6.82%, 03/03/2032				$	3,311			$	3,308
iSolved, Inc., 1st Lien Term Loan, 1M SOFR + 3.00%, 7.33%, 10/15/2030					2,510				2,517
Minimax Viking GmbH, 1st Lien Term Loan (Germany), 1M SOFR + 2.50%, 4.43%, 03/17/2032				€	1,111				1,306
									7,131
Consumer Distribution and Retail 1.1%
Peer Holding III B.V., 1st Lien Term Loan (Netherlands), 3M SOFR + 2.50%, 6.80%, 10/28/2030				$	3,950				3,971
Consumer Services 3.4%
Belfor Holdings, Inc., 1st Lien Term Loan, 1M SOFR + 3.00%, 7.33%, 11/01/2030					1,132				1,132
Betclic Everest Group, 1st Lien Term Loan (France), 3M SOFR + 3.25%, 5.39%, 12/10/2031				€	1,600				1,884
Century De Buyer, LLC, 1st Lien Term Loan, 3M SOFR + 3.50%, 7.78%, 10/30/2030				$	3,465				3,484
Fugue Finance B.V., 1st Lien Term Loan (Netherlands), 3M SOFR + 3.25%, 7.57%, 01/09/2032					500				503
Fugue Finance B.V., 1st Lien Term Loan (Netherlands), 3M SOFR + 3.25%, 7.58%, 01/09/2032					1,018				1,023
Herschend Entertainment Company, LLC, 1st Lien Term Loan, 1M SOFR + 3.25%, 7.57%, 05/27/2032					2,250				2,263
IRB Holding Corp., 1st Lien Term Loan, 1M SOFR + 2.50%, 6.83%, 12/15/2027					1,744				1,744
									12,033
Energy 3.0%
CPPIB OVM Member U.S., LLC, 1st Lien Term Loan, 3M SOFR + 2.75%, 7.05%, 08/20/2031					2,894				2,883
Freeport LNG Investments, LLLP, 1st Lien Term Loan, 12/21/2028(e)​					1,000				1,000
Freeport LNG Investments, LLLP, 1st Lien Term Loan, 3M SOFR + 3.00%, 7.53%, 11/16/2026					3,699				3,684
Prairie ECI Acquiror, L.P., 1st Lien Term Loan, 1M SOFR + 4.25%, 8.58%, 08/01/2029					343				345

Ares Dynamic Credit Allocation Fund, Inc.

Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans^(b)(c)(d)​ (continued)

				Principal Amount(a)​				Value(a)​
TransMontaigne Operating Company, LP, 1st Lien Term Loan, 1M SOFR + 3.25%, 7.58%, 11/17/2028				$	2,468			$	2,476
									10,388
Financial Services 1.8%
Athena Holdco S.A.S., 1st Lien Term Loan (France), 3M EURIBOR + 3.25%, 5.23%, 04/14/2031				€	3,020				3,549
Blackhawk Network Holdings, Inc., 1st Lien Term Loan, 1M SOFR + 4.00%, 8.33%, 03/12/2029				$	1,493				1,500
Shift4 Payments, LLC, 1st Lien Term Loan, 05/10/2032(e)​					1,250				1,260
									6,309
Food and Beverage 1.3%
Chobani, LLC, 1st Lien Term Loan, 1M SOFR + 2.50%, 6.82%, 10/25/2027					4,394				4,404
Healthcare Equipment and Services 6.7%
Bausch + Lomb Corp., 1st Lien Term Loan (Canada), 1M SOFR + 4.00%, 8.33%, 09/29/2028					1,965				1,963
CNT Holdings I Corp., 1st Lien Term Loan, 3M SOFR + 2.50%, 6.78%, 11/08/2032					2,396				2,400
Confluent Medical Technologies, Inc., 1st Lien Term Loan, 3M SOFR + 3.25%, 7.55%, 02/16/2029					2,475				2,472
Electron BidCo, Inc., 1st Lien Term Loan, 1M SOFR + 2.75%, 7.08%, 11/01/2028					2,993				2,999
Ensemble RCM, LLC, 1st Lien Term Loan, 3M SOFR + 3.00%, 7.28%, 08/01/2029					4,288				4,304
Mamba Purchaser, Inc., 1st Lien Term Loan, 1M SOFR + 2.75%, 7.08%, 10/16/2028					2,494				2,491
Medline Borrower, LP, 1st Lien Term Loan, 1M SOFR + 2.25%, 6.58%, 10/23/2028					2,226				2,227
Resonetics, LLC, 1st Lien Term Loan, 3M SOFR + 3.25%, 7.57%, 06/18/2031					2,617				2,617
Sotera Health Holdings, LLC, 1st Lien Term Loan, 3M SOFR + 3.25%, 7.55%, 05/30/2031					1,737				1,742
									23,215
Insurance 2.2%
Acrisure, LLC, 1st Lien Term Loan, 1M SOFR + 3.00%, 7.33%, 11/06/2030					1,988				1,980

Senior Loans^(b)(c)(d)​ (continued)

				Principal Amount(a)​				Value(a)​
Alliant Holdings Intermediate, LLC, 1st Lien Term Loan, 1M SOFR + 2.75%, 7.07%, 09/19/2031				$	997			$	998
Howden Group Holdings, Ltd., 1st Lien Term Loan (Luxembourg), 1M SOFR + 3.00%, 7.33%, 02/15/2031					1,596				1,600
HUB International, Ltd., 1st Lien Term Loan, 3M SOFR + 2.50%, 6.77%, 06/20/2030					2,971				2,979
									7,557
Materials 3.1%
Ahlstrom-Munksjo Holding 3 Oy, 1st Lien Term Loan (Finland), 05/22/2030(e)(f)​					4,500				4,482
Nouryon Finance B.V., 1st Lien Term Loan (Netherlands), 3M SOFR + 3.25%, 7.51%, 04/03/2028					1,988				1,995
Nouryon Finance B.V., 1st Lien Term Loan (Netherlands), 3M SOFR + 3.25%, 7.55%, 04/03/2028					985				989
WR Grace Holdings, LLC, 1st Lien Term Loan, 3M SOFR + 3.25%, 7.55%, 09/22/2028					3,226				3,229
									10,695
Media and Entertainment 3.9%
Creative Artists Agency, LLC, 1st Lien Term Loan, 1M SOFR + 2.75%, 7.08%, 10/01/2031					4,254				4,264
Gray Television, Inc., 1st Lien Term Loan, 1M SOFR + 3.00%, 7.44%, 12/01/2028					3,190				3,081
NEP Group, Inc., 1st Lien Term Loan, 3M SOFR + 4.00%, 8.59%, 08/19/2026					2,622				2,373
Univision Communications, Inc., 1st Lien Term Loan, 3M SOFR + 4.25%, 8.55%, 06/24/2029					972				964
Virgin Media Bristol, LLC, 1st Lien Term Loan, 6M SOFR + 3.18%, 7.37%, 03/31/2031					3,000				2,959
									13,641
Pharmaceuticals, Biotechnology and Life Sciences 0.7%
Precision Medicine Group, LLC, 1st Lien Term Loan, 1M SOFR + 3.00%, 7.43%, 11/18/2027					2,481				2,477
Real Estate Management and Development 1.1%
Forest City Enterprises, LP, 1st Lien Term Loan, 1M SOFR + 3.50%, 7.94%, 12/08/2025					4,001				3,870

Ares Dynamic Credit Allocation Fund, Inc.

Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Senior Loans^(b)(c)(d)​ (continued)

				Principal Amount(a)​				Value(a)​
Semiconductors and Semiconductor Equipment 0.7%
SanDisk Corp., 1st Lien Term Loan, 02/20/2032(e)​				$	2,500			$	2,484
Software and Services 10.0%
Access CIG, LLC, 1st Lien Term Loan, 6M SOFR + 4.25%, 8.38%, 08/18/2028					2,216				2,224
Applied Systems, Inc., 1st Lien Term Loan, 3M SOFR + 2.50%, 6.80%, 02/24/2031					4,407				4,424
Asurion, LLC, 1st Lien Term Loan, 1M SOFR + 3.25%, 7.69%, 07/31/2027					990				988
Asurion, LLC, 1st Lien Term Loan, 1M SOFR + 4.00%, 8.43%, 08/19/2028					2,450				2,413
Avalara, Inc., 1st Lien Term Loan, 3M SOFR + 3.25%, 7.55%, 03/26/2032					4,500				4,516
BEP Intermediate Holdco, LLC, 1st Lien Term Loan, 1M SOFR + 3.25%, 7.58%, 04/25/2031					3,049				3,053
Conservice Midco, LLC, 1st Lien Term Loan, 1M SOFR + 3.00%, 7.33%, 05/13/2030					2,475				2,476
Databricks, Inc., 1st Lien Delay Draw Term Loan, 01/03/2031(h)(f)​					—				—
Databricks, Inc., 1st Lien Term Loan, 1M SOFR + 4.50%, 8.83%, 01/03/2031(f)​					4,098				4,124
McAfee Corp., 1st Lien Term Loan, 1M SOFR + 3.00%, 7.33%, 03/01/2029					2,985				2,895
Project Boost Purchaser, LLC, 1st Lien Term Loan, 3M SOFR + 3.00%, 7.30%, 07/16/2031					2,985				2,989
Proofpoint, Inc., 1st Lien Term Loan, 1M SOFR + 3.00%, 7.33%, 08/31/2028					3,990				3,990
Queen Mergerco, Inc., 1st Lien Term Loan, 3M SOFR + 3.00%, 7.30%, 04/30/2032					756				760
									34,852
Technology Hardware and Equipment 1.2%
CommScope, Inc., 1st Lien Term Loan, 12/17/2029(e)​					4,000				4,044
Ivanti Security Holdings, LLC, 1st Lien Revolving Loan, 06/01/2029(h)​					—				—
									4,044
Telecommunication Services 1.5%
Delta TopCo, Inc., 1st Lien Term Loan, 3M SOFR + 2.75%, 7.07%, 11/30/2029					1,733				1,719

Senior Loans^(b)(c)(d)​ (continued)

				Principal Amount(a)​				Value(a)​
Lumen Technologies, Inc., 1st Lien Term Loan, 1M SOFR + 6.00%, 10.33%, 06/01/2028				$	866			$	887
QualityTech, L.P., 1st Lien Term Loan, 1M SOFR + 3.50%, 7.83%, 11/04/2031(f)​					2,494				2,497
									5,103
Transportation 0.2%
SkyMiles IP, Ltd., 1st Lien Term Loan (Cayman Islands), 3M SOFR + 3.75%, 8.02%, 10/20/2027					613				616
Utilities 3.3%
Astoria Energy, LLC, 1st Lien Term Loan, 06/16/2032(e)​					2,000				2,000
Cogentrix Finance Holdco I, LLC, 1st Lien Term Loan, 1M SOFR + 2.75%, 7.08%, 02/26/2032					3,242				3,247
Hamilton Projects Acquiror, LLC, 1st Lien Term Loan, 05/30/2031(e)​					1,250				1,254
Hamilton Projects Acquiror, LLC, 1st Lien Term Loan, 1M SOFR + 3.00%, 7.33%, 05/31/2031					2,197				2,203
South Field Energy, LLC, 1st Lien Term Loan, 3M SOFR + 3.25%, 7.55%, 08/29/2031					2,869				2,880
									11,584
Total Senior Loans (Cost: $215,183)									216,157

Corporate Bonds 52.8%

Automobiles and Components 0.6%
Clarios Global, LP, 8.50%, 05/15/2027(d)​					1,500				1,506
Wand NewCo 3, Inc., 7.63%, 01/30/2032(d)​					500				526
									2,032
Capital Goods 5.2%
Bombardier, Inc., (Canada), 6.75%, 06/15/2033(d)​					1,000				1,036
Bombardier, Inc., (Canada), 8.75%, 11/15/2030(d)​					2,500				2,706
Builders FirstSource, Inc., 6.38%, 03/01/2034(d)​					1,650				1,681
Builders FirstSource, Inc., 6.75%, 05/15/2035(d)​					2,500				2,577
Gates Corp., 6.88%, 07/01/2029(d)​					1,000				1,038

Ares Dynamic Credit Allocation Fund, Inc.

Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Corporate Bonds (continued)

				Principal Amount(a)​				Value(a)​
Lottomatica Group SpA, 11.00%, 08/15/2032(d)​				$	1,000			$	909
OneSky Flight, LLC, 8.88%, 12/15/2029(d)​					3,000				3,124
Standard Building Solutions, Inc., 6.50%, 08/15/2032(d)​					3,000				3,074
United Rentals, Inc., 6.13%, 03/15/2034(d)​					2,000				2,060
									18,205
Consumer Durables and Apparel 0.7%
Ashton Woods USA, LLC, 6.63%, 01/15/2028(d)​					2,500				2,510
Consumer Services 3.2%
Caesars Entertainment, Inc., 8.13%, 07/01/2027(d)​					1,940				1,948
Hilton Domestic Operating Co., Inc., 5.75%, 05/01/2028(d)​					4,000				4,009
MGM Resorts International, 6.50%, 04/15/2032					2,500				2,540
Six Flags Entertainment Corp., 7.00%, 07/01/2025(d)​					1,379				1,379
Station Casinos, LLC, 6.63%, 03/15/2032(d)​					1,200				1,230
									11,106
Energy 10.5%
Antero Resources Corp., 7.63%, 02/01/2029(d)​					2,222				2,281
Ascent Resources — Utica ,LLC, 6.63%, 07/15/2033(d)​					1,000				1,015
Blue Racer Midstream, LLC, 6.63%, 07/15/2026(d)​					1,500				1,501
Blue Racer Midstream, LLC, 7.00%, 07/15/2029(d)​					1,500				1,563
DCP Midstream Operating, LP, 8.13%, 08/16/2030					3,330				3,867
Moss Creek Resources Holdings, Inc., 8.25%, 09/01/2031(d)​					3,685				3,584
Occidental Petroleum Corp., 8.88%, 07/15/2030					3,500				3,998
Parkland Corp., (Canada), 6.63%, 08/15/2032(d)​					2,000				2,044
Sunoco, LP, 7.25%, 05/01/2032(d)​					3,125				3,282
Tallgrass Energy Partners, LP, 7.38%, 02/15/2029(d)​					2,500				2,569

Corporate Bonds (continued)

				Principal Amount(a)​				Value(a)​
TransMontaigne Partners, LLC, 8.50%, 06/15/2030(d)​				$	2,750			$	2,861
Transocean, Inc., (Cayman Islands), 6.80%, 03/15/2038					1,061				746
Transocean, Inc., (Cayman Islands), 8.75%, 02/15/2030(d)​					600				617
Western Midstream Operating, LP, 5.25%, 02/01/2050					2,125				1,789
Williams Cos., Inc., 8.75%, 03/15/2032					4,000				4,813
									36,530
Equity Real Estate Investment Trusts (REITs) 1.1%
HAT Holdings I, LLC, 8.00%, 06/15/2027(d)​					3,778				3,936
Financial Services 3.3%
Ally Financial, Inc., 8.00%, 11/01/2031					2,000				2,276
CHS/Community Health Systems, Inc., 10.88%, 01/15/2032(d)​					1,500				1,590
Ford Motor Credit Co., LLC, 6.80%, 05/12/2028					2,500				2,584
Ford Motor Credit Co., LLC, 6.95%, 06/10/2026					1,000				1,014
Ford Motor Credit Co., LLC, 7.35%, 11/04/2027					1,465				1,521
Shift4 Payments, LLC, 6.75%, 08/15/2032(d)​					400				416
Summit Midstream Holdings, LLC, 8.63%, 10/31/2029(d)​					2,200				2,246
									11,647
Healthcare Equipment and Services 1.0%
LifePoint Health, Inc., 8.38%, 02/15/2032(d)​					800				853
Molina Healthcare, Inc., 6.25%, 01/15/2033(d)​					2,500				2,541
									3,394
Insurance 1.5%
Acrisure, LLC, 7.50%, 11/06/2030(d)​					1,081				1,117
Alliant Holdings Intermediate, LLC / Alliant Holdings Co-Issuer, 6.75%, 04/15/2028(d)​					2,500				2,539
Howden U.K. Refinance PLC, (Great Britain), 7.25%, 02/15/2031(d)​					1,400				1,450
									5,106

Ares Dynamic Credit Allocation Fund, Inc.

Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Corporate Bonds (continued)

				Principal Amount(a)​				Value(a)​
Materials 3.5%
Crown Cork & Seal Co., Inc., 7.38%, 12/15/2026				$	4,350			$	4,518
JH North America Holdings ,Inc., 6.13%, 07/31/2032(d)​					1,850				1,881
Kobe U.S. Midco 2, Inc., 9.25% PIK, 11/01/2026(d)​					1,621				1,451
Quikrete Holdings, Inc., 6.38%, 03/01/2032(d)​					2,750				2,832
Trident TPI Holdings, Inc., 12.75%, 12/31/2028(d)​					1,500				1,591
									12,273
Media and Entertainment 4.4%
Belo Corp., 7.25%, 09/15/2027					3,250				3,351
Charter Communications Operating, LLC, 6.10%, 06/01/2029					1,650				1,727
Charter Communications Operating, LLC, 6.55%, 06/01/2034					1,650				1,761
Fox Corp., 6.50%, 10/13/2033					3,000				3,246
Live Nation Entertainment, Inc., 6.50%, 05/15/2027(d)​					3,250				3,298
Univision Communications, Inc., 8.00%, 08/15/2028(d)​					2,000				2,029
									15,412
Pharmaceuticals, Biotechnology and Life Sciences 1.3%
1261229 BC, Ltd., (Canada), 10.00%, 04/15/2032(d)​					1,500				1,513
IQVIA, Inc., 6.25%, 06/01/2032(d)​					2,850				2,926
									4,439
Semiconductors and Semiconductor Equipment 0.7%
Amkor Technology, Inc., 6.63%, 09/15/2027(d)​					2,500				2,506
Software and Services 3.3%
Beacon Roofing Supply, Inc., 6.75%, 04/30/2032(d)​					1,000				1,030
Fair Isaac Corp., 6.00%, 05/15/2033(d)​					2,000				2,020
Leidos, Inc., 7.13%, 07/01/2032					2,500				2,764
Open Text Corp., (Canada), 6.90%, 12/01/2027(d)​					3,000				3,106
SS&C Technologies, Inc., 6.50%, 06/01/2032(d)​					2,500				2,595
									11,515

Corporate Bonds (continued)

				Principal Amount(a)​				Value(a)​
Technology Hardware and Equipment 2.8%
Amentum Holdings, Inc., 7.25%, 08/01/2032(d)​				$	3,250			$	3,345
Dell International, LLC, 6.02%, 06/15/2026					875				884
Dell International, LLC, 6.10%, 07/15/2027					1,500				1,550
Diebold Nixdorf, Inc., 7.75%, 03/31/2030(d)​					2,250				2,390
Insight Enterprises, Inc., 6.63%, 05/15/2032(d)​					1,500				1,545
									9,714
Telecommunication Services 3.8%
Bell Telephone Co of Canada or Bell Canada, (Canada), 5yr. CMT + 2.39%, 6.88%, 09/15/2055(c)​					500				510
Bell Telephone Co of Canada or Bell Canada, (Canada), 5yr. CMT + 2.36%, 7.00%, 09/15/2055(c)​					500				507
Iliad Holding S.A.S, (France), 7.00%, 10/15/2028(d)​					1,000				1,018
Level 3 Financing, Inc., 10.00%, 10/15/2032(d)​					750				758
Lumen Technologies, Inc., 10.00%, 10/15/2032(d)​					1,750				1,787
Minimax Viking GmbH, 11.00%, 11/15/2029(d)​					1,118				1,282
Rogers Communications, Inc., (Canada), 5yr. CMT + 2.65%, 7.00%, 04/15/2055(c)​					1,500				1,530
Rogers Communications, Inc., (Canada), 5yr. CMT + 2.62%, 7.13%, 04/15/2055(c)​					500				507
Sprint, LLC, 7.63%, 03/01/2026					5,250				5,300
									13,199
Transportation 2.7%
GLP Capital, LP, 5.38%, 04/15/2026					3,000				3,001
Hamilton Projects Acquiror, LLC, 6.25%, 06/01/2028(d)​					3,500				3,551
Mileage Plus Holdings, LLC, 6.50%, 06/20/2027(d)​					2,300				2,303
Uber Technologies, Inc., 7.50%, 09/15/2027(d)​					545				550
									9,405

Ares Dynamic Credit Allocation Fund, Inc.

Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Corporate Bonds (continued)

				Principal Amount(a)​				Value(a)​
Utilities 3.2%
CQP Holdco, LP, 7.50%, 12/15/2033(d)​				$	1,750			$	1,898
NRG Energy, Inc., 6.25%, 11/01/2034(d)​					2,000				2,041
Venture Global Plaquemines LNG, LLC, 6.50%, 01/15/2034(d)(g)​					750				750
Venture Global Plaquemines LNG, LLC, 7.50%, 05/01/2033(d)​					1,500				1,606
Venture Global Plaquemines LNG, LLC, 7.75%, 05/01/2035(d)​					1,500				1,624
Vistra Operations Co, LLC, 7.75%, 10/15/2031(d)​					3,000				3,191
									11,110
Total Corporate Bonds (Cost: $180,413)									184,039

Collateralized Loan Obligations 44.9%^(d)(f)​

Collateralized Loan Obligations — Debt 24.4%(b)(c)​
Investment Funds and Vehicles 24.4%
Atrium XIV, LLC, (Cayman Islands), 3M LIBOR + 6.50%, 10.76%, 10/16/2037					2,800				2,810
Atrium XV, (Cayman Islands), 3M LIBOR + 6.50%, 10.76%, 07/16/2037					1,188				1,187
Bain Capital Credit CLO 2020-1, Ltd., (Cayman Islands), 3M LIBOR + 7.15%, 11.42%, 04/18/2033					1,000				1,003
Bain Capital Credit CLO, Ltd. 2021-5, (Cayman Islands), 3M LIBOR + 6.76%, 11.04%, 10/23/2034					2,000				1,940
Ballyrock CLO 26, Ltd., (Cayman Islands), 3M LIBOR + 6.10%, 10.38%, 07/25/2037					950				963
Benefit Street Partners CLO XIV, Ltd., (Cayman Islands), 3M LIBOR + 6.15%, 10.42%, 10/20/2037					2,750				2,772
Benefit Street Partners CLO XXXIV, Ltd., (Cayman Islands), 3M LIBOR + 6.70%, 10.98%, 07/25/2037					500				509
Benefit Street Partners CLO XXXV, Ltd., (Jersey), 3M LIBOR + 6.10%, 10.38%, 04/25/2037					750				763
Brookhaven Park CLO, Ltd., (Cayman Islands), 3M LIBOR + 6.50%, 10.77%, 04/19/2037					500				503
Captree Park CLO, Ltd., (Jersey), 3M LIBOR + 6.00%, 10.27%, 07/20/2037					875				885

Collateralized Loan Obligations^(d)(f)​ (continued)

				Principal Amount(a)​				Value(a)​
Carlyle US CLO 2024-1, Ltd., (Cayman Islands), 3M LIBOR + 6.92%, 11.18%, 04/15/2037				$	548			$	558
Carlyle US CLO 2024-2, Ltd., (Cayman Islands), 3M LIBOR + 6.85%, 11.13%, 04/25/2037					1,000				1,018
Carlyle US CLO 2024-3, Ltd., (Cayman Islands), 3M LIBOR + 6.40%, 10.68%, 07/25/2036					1,600				1,627
Carlyle US CLO, 2019-3 Ltd., (Cayman Islands), 3M LIBOR + 7.34%, 11.61%, 04/20/2037					1,650				1,682
Carlyle US CLO, 2021 11A Ltd., (Cayman Islands), 3M LIBOR + 6.50%, 10.78%, 07/25/2037					500				497
Carlyle US CLO, 2022-5 Ltd., (Cayman Islands), 3M LIBOR + 7.10%, 11.36%, 10/15/2037					2,095				2,125
Cedar Funding CLO II, Ltd., (Cayman Islands), 3M LIBOR + 7.56%, 11.83%, 04/20/2034					1,750				1,757
CIFC Funding Ltd. 2021-1A, (Cayman Islands), 3M LIBOR + 6.00%, 10.28%, 07/25/2037					1,150				1,154
CIFC Funding, Ltd. 2019-4A, (Cayman Islands), 3M LIBOR + 6.86%, 11.12%, 10/15/2034					1,500				1,500
CIFC Funding, Ltd. 2021-VI, (Cayman Islands), 3M LIBOR + 6.51%, 10.77%, 10/15/2034					2,000				2,009
CIFC Funding, Ltd. 2021-VII, (Cayman Islands), 3M LIBOR + 6.61%, 10.89%, 01/23/2035					2,406				2,422
Dryden 104 CLO, Ltd., (Cayman Islands), 3M LIBOR + 7.40%, 11.72%, 08/20/2034					2,878				2,900
Dryden 115 CLO, Ltd., (Jersey), 3M LIBOR + 7.10%, 11.37%, 04/18/2037					1,000				1,020
Elmwood CLO 20, Ltd., (Cayman Islands), 3M LIBOR + 6.00%, 10.28%, 01/17/2037					2,000				2,006
Elmwood CLO 28, Ltd., (Cayman Islands), 3M LIBOR + 6.00%, 10.28%, 04/17/2037					500				508
Elmwood CLO I, Ltd., (Cayman Islands), 3M LIBOR + 6.40%, 10.67%, 04/20/2037					3,000				2,997
Elmwood CLO IV, Ltd., (Cayman Islands), 3M LIBOR + 6.15%, 10.42%, 04/18/2037					1,369				1,374
Elmwood CLO VIII, Ltd., (Cayman Islands), 3M LIBOR + 6.25%, 10.52%, 04/20/2037					2,514				2,506

Ares Dynamic Credit Allocation Fund, Inc.

Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations^(d)(f)​ (continued)

				Principal Amount(a)​				Value(a)​
Empower CLO , Ltd., (Jersey), 3M LIBOR + 7.82%, 12.09%, 01/20/2037				$	250			$	252
Flatiron CLO 21 Ltd., (Cayman Islands), 3M LIBOR + 5.90%, 10.17%, 10/19/2037					250				250
Flatiron CLO 24, Ltd., (Jersey), 3M LIBOR + 7.83%, 12.09%, 01/15/2037					250				255
Freeport LNG investments, LLLP, (Cayman Islands), 3M LIBOR + 0.00%, 7.94%, 04/20/2038					1,900				1,918
Generate CLO 14, Ltd., (Cayman Islands), 3M LIBOR + 6.75%, 11.03%, 04/22/2037					500				501
Generate CLO 16, Ltd., (Cayman Islands), 3M LIBOR + 6.15%, 10.42%, 07/20/2037					500				503
Golub Capital Partners CLO 60B, Ltd., (Cayman Islands), 3M LIBOR + 6.00%, 10.28%, 10/25/2034					1,250				1,251
Invesco CLO, Ltd., (Cayman Islands), 3M LIBOR + 6.41%, 10.67%, 07/15/2034					1,000				974
KKR CLO 45A Ltd, (Cayman Islands), 3M LIBOR + 7.30%, 11.56%, 04/15/2035					1,000				1,006
KKR CLO 46, Ltd., (Cayman Islands), 3M LIBOR + 7.00%, 11.27%, 10/20/2037					250				251
Madison Park Funding LIX, Ltd., (Cayman Islands), 3M LIBOR + 6.40%, 10.67%, 04/18/2037					1,350				1,350
Madison Park Funding LV, Ltd., (Cayman Islands), 3M LIBOR + 6.00%, 10.27%, 07/18/2037					1,000				992
Madison Park Funding LVII, Ltd., (Cayman Islands), 3M LIBOR + 6.70%, 10.98%, 07/27/2034					1,185				1,181
Madison Park Funding LXI, Ltd., (Jersey), 3M LIBOR + 7.68%, 11.95%, 01/20/2037					250				255
Madison Park Funding LXIX Ltd., (Cayman Islands), 3M LIBOR + 6.25%, 10.53%, 07/25/2037					1,000				1,015
Madison Park Funding XIV, Ltd., (Cayman Islands), 3M LIBOR + 8.03%, 12.30%, 10/22/2030					2,500				2,164
Madison Park Funding XXXI, Ltd., (Cayman Islands), 3M LIBOR + 6.40%, 10.68%, 07/23/2037					775				775
Madison Park Funding XXXII, Ltd., (Cayman Islands), 3M LIBOR + 6.40%, 10.67%, 07/22/2037					3,000				2,994
Madison Park Funding XXXIV Ltd., (Cayman Islands), 3M LIBOR + 6.50%, 10.76%, 10/16/2037					850				849

Collateralized Loan Obligations^(d)(f)​ (continued)

				Principal Amount(a)​				Value(a)​
Madison Park Funding XXXV, Ltd., (Cayman Islands), 3M LIBOR + 6.36%, 10.63%, 04/20/2032				$	1,500			$	1,505
Madison Park Funding XXXVII, Ltd., (Cayman Islands), 3M LIBOR + 6.60%, 10.86%, 04/15/2037					500				501
Magnetite XXIV, Ltd., (Cayman Islands), 3M LIBOR + 6.40%, 10.66%, 04/15/2035					2,750				2,757
Magnetite XXIX, Ltd., (Cayman Islands), 3M LIBOR + 6.00%, 10.26%, 07/15/2037					250				254
Milford Park CLO, Ltd., (Jersey), 3M LIBOR + 0.00%, 7.83%, 01/20/2038					1,500				1,511
Oak Hill Credit Partners X-R, Ltd., (Cayman Islands), 3M LIBOR + 4.40%, 8.67%, 04/20/2038					1,500				1,491
OCP CLO 2021-21, Ltd., (Cayman Islands), 3M LIBOR + 0.00%, 7.82%, 01/20/2038					1,700				1,701
Octagon Investment Partners 49, Ltd., (Cayman Islands), 3M LIBOR + 7.33%, 11.59%, 04/15/2037					1,000				1,003
OHA Credit Funding 12, Ltd. 2022-12, (Bermuda), 3M LIBOR + 8.00%, 12.27%, 07/20/2036					1,975				1,997
OHA Credit Funding 3, Ltd., (Cayman Islands), 3M LIBOR + 5.00%, 9.27%, 01/20/2038					1,000				995
OHA Credit Partners XIII, Ltd., (Cayman Islands), 3M LIBOR + 5.75%, 10.02%, 10/21/2037					610				615
OHA Loan Funding 2013-1, Ltd., (Cayman Islands), 3M LIBOR + 5.90%, 10.18%, 04/23/2037					1,500				1,519
Sixth Street CLO XX, Ltd, (Cayman Islands), 3M LIBOR + 6.41%, 10.68%, 10/20/2034					1,500				1,500
Tallman Park CLO, Ltd., (Cayman Islands), 3M LIBOR + 6.61%, 10.88%, 04/20/2034					2,000				2,000
TCI-Flatiron CLO, Ltd. 2018-1, (Cayman Islands), 3M LIBOR + 6.41%, 10.69%, 01/29/2032					3,000				3,010
Trimaran Cavu 2021-1, Ltd., (Cayman Islands), 3M LIBOR + 7.00%, 11.28%, 07/23/2037					625				627
Voya CLO , Ltd., (Cayman Islands), 3M LIBOR + 6.05%, 10.32%, 07/20/2037					350				354
									85,071

Ares Dynamic Credit Allocation Fund, Inc.

Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations^(d)(f)​ (continued)

				Principal Amount(a)​				Value(a)​
Collateralized Loan Obligations — Equity 20.5%
Investment Funds and Vehicles 20.5%
AIMCO CLO 23, Ltd., (Cayman Islands), 04/20/2038				$	1,860			$	1,753
AIMCO CLO XI, Ltd., (Cayman Islands), 19.91%, 10/17/2034					2,180				1,810
AIMCO CLO XVI, Ltd., (Cayman Islands), 14.70%, 07/17/2037					1,208				874
AIMCO CLO XX, Ltd., (Cayman Islands), 12.55%, 10/16/2036					1,588				1,241
AIMCO CLO XXII, Ltd., (Jersey), 13.86%, 04/19/2037					410				333
Allegro CLO V, Ltd., (Cayman Islands), 10/16/2030					2,000				—
Atrium XIV, LLC, (Cayman Islands), 16.06%, 10/16/2037					6,744				3,743
Bain Capital Credit CLO 2024-2, Ltd., (Jersey), 14.20%, 07/15/2037					960				740
Bain Capital Credit CLO, Ltd. 2020-2, (Cayman Islands), 27.54%, 07/19/2034					1,250				527
Bain Capital Credit CLO, Ltd. 2022-1, (Cayman Islands), 4.77%, 04/18/2035					1,500				632
Benefit Street Partners Clo XXXVII, Ltd., (Cayman Islands), 15.46%, 01/25/2038					1,950				2,090
Blueberry Park CLO, Ltd., (Jersey), 0.13%, 10/20/2037					1,840				109
Blueberry Park CLO, Ltd., (Jersey), 13.84%, 10/20/2037					1,840				1,411
Carlyle Global Market Strategies CLO, Ltd. 2018-3, (Cayman Islands), 10/15/2030					3,223				999
Carlyle US CLO 2024-3, Ltd., (Cayman Islands), 13.30%, 07/25/2036					2,250				1,592
Carlyle US CLO 2024-5, Ltd., (Cayman Islands), 13.37%, 10/25/2036					1,580				1,327
CIFC Funding 2024-III, Ltd., (Cayman Islands), 12.83%, 07/21/2037					400				335
CIFC Funding 2024-IV, Ltd., (Cayman Islands), 13.69%, 10/16/2037					1,830				1,649
CIFC Funding, Ltd. 2020-3A, (Cayman Islands), 17.85%, 10/20/2034					1,996				1,268
CIFC Funding, Ltd. 2021-5A, (Cayman Islands), 15.31%, 01/15/2038					2,986				1,969
Dryden 98 CLO, Ltd., (Cayman Islands), 10.52%, 04/20/2035					1,100				505
Elmwood CLO 26, Ltd., (Cayman Islands), 10.21%, 04/18/2037					500				350

Collateralized Loan Obligations^(d)(f)​ (continued)

				Principal Amount(a)​				Value(a)​
Elmwood CLO 32, Ltd., (Cayman Islands), 13.47%, 10/18/2037				$	1,770			$	1,452
Elmwood CLO 35, Ltd., (Cayman Islands), 12.55%, 10/18/2037					1,020				831
Elmwood CLO XI, Ltd., (Cayman Islands), 17.95%, 10/20/2034					1,280				1,126
Generate Clo 18, Ltd., (Cayman Islands), 16.79%, 01/20/2038					4,190				4,010
Invesco CLO 2021-3, Ltd., (Cayman Islands), 10/22/2034					113				32
Invesco CLO 2021-3, Ltd., (Cayman Islands), 21.75%, 10/22/2034					1,130				401
KKR CLO 50 Ltd, (Cayman Islands), 7.61%, 04/20/2037					1,151				749
LCM XV, LP, (Cayman Islands), 07/20/2030					5,875				126
Madison Park Funding LIII, Ltd., (Cayman Islands), 7.16%, 04/21/2035					2,188				1,121
Madison Park Funding LIX, Ltd., (Cayman Islands), 5.65%, 04/18/2037					2,762				1,767
Madison Park Funding LXVI, Ltd., (Cayman Islands), 13.53%, 10/21/2037					560				548
Madison Park Funding LXVII, Ltd., (Cayman Islands), 10.69%, 04/25/2037					250				208
Madison Park Funding LXXI, Ltd., (Cayman Islands), 04/23/2038					630				635
Madison Park Funding XII, Ltd., (Cayman Islands), 07/20/2026					4,000				1
Madison Park Funding XXII, Ltd., (Cayman Islands), 13.22%, 01/15/2033					6,193				3,292
Madison Park Funding XXX, Ltd., (Cayman Islands), 13.45%, 07/16/2027					2,715				1,391
Madison Park Funding XXXI, Ltd., (Cayman Islands), 9.54%, 07/23/2037					2,000				983
Madison Park Funding XXXII, Ltd., (Cayman Islands), 12.69%, 01/22/2048					2,472				1,190
Madison Park Funding, Ltd., (Cayman Islands), 15.40%, 07/21/2038					1,589				1,063
Magnetite XLIV Ltd., 11.92%, 10/15/2037					2,400				1,982
Magnetite XXVIII, Ltd., (Cayman Islands), 19.86%, 01/20/2035					2,803				2,249
Magnetite XXXVIII, Ltd., 8.67%, 04/15/2037					250				192
Oaktree CLO, Ltd. 2015-1, (Cayman Islands), 10/20/2027					4,000				74
OCP CLO 2024-34, Ltd., 14.62%, 10/15/2037					450				357

Ares Dynamic Credit Allocation Fund, Inc.

Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Collateralized Loan Obligations^(d)(f)​ (continued)

				Principal Amount(a)​				Value(a)​
OHA Credit Funding 1, Ltd., (Cayman Islands), 10.44%, 04/20/2037				$	5,700			$	4,371
OHA Credit Partners VII, Ltd., (Cayman Islands), 25.90%, 02/20/2038					2,672				1,641
OHA Credit Partners XI, Ltd., (Cayman Islands), 9.84%, 04/20/2037					400				225
OHA Credit Partners XIV, Ltd., (Cayman Islands), 13.04%, 07/21/2037					753				573
OHA Credit Partners XVI, (Cayman Islands), 16.86%, 10/18/2034					1,675				1,271
OHA Credit Partners XVII, Ltd., (Cayman Islands), 11.82%, 01/18/2038					610				567
OHA Loan Funding, Ltd. 2016-1, (Cayman Islands), 18.46%, 07/20/2037					3,613				2,181
RR 19, Ltd., (Cayman Islands), 18.34%, 10/15/2121					2,471				2,018
RR 38, Ltd., (Cayman Islands), 13.14%, 04/15/2040					470				412
RRX 7 Ltd. 2022-7, (Cayman Islands), 7.94%, 07/15/2122					3,875				1,803
Signal Peak CLO XI Ltd., (Cayman Islands), 18.91%, 07/18/2037					1,750				1,571
Voya CLO 2024-1, Ltd., (Cayman Islands), 13.88%, 04/15/2037					2,142				1,703
Wellman Park CLO, Ltd., (Cayman Islands), 07/15/2034					6,070				170
Wellman Park CLO, Ltd., (Cayman Islands), 14.02%, 07/20/2037					2,500				1,620
									71,163
Total Collateralized Loan Obligations (Cost: $163,409)									156,234
Total Investments — 159.8% (Cost: $559,005)								$	556,430
Liabilities in Excess of Other Assets — (59.8%)									(208,321	)
Net Assets — 100.0%								$	348,109

  

Ares Dynamic Credit Allocation Fund, Inc.

Schedule of Investments (continued)

June 30, 2025 (Unaudited)

(in thousands, except shares, percentages and as otherwise noted)

Footnotes:

(a)  Investment holdings in foreign currencies are converted to U.S. Dollars using period end spot rates. Investments are in United States enterprises and all principal balances shown are in U.S. Dollars unless otherwise noted.

(b)  Variable rate loans bear interest at a rate that may be determined by reference to the Secured Overnight Financing Rate ("SOFR"), the London Interbank Offered Rate ("LIBOR"), Euro InterBank Offered Rate ("EURIBOR"), the U.S. Prime Rate ("PRIME"), or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), at the borrower's option, which reset annually, semi-annually, quarterly, bi-monthly, monthly or daily. SOFR based contracts may include a credit spread adjustment that is charged in addition to the base rate and the stated spread. For each such loan, Ares Dynamic Credit Allocation Fund, Inc. (the "Fund") has provided the interest rate in effect on the date presented.

(c)  Variable rate coupon rate shown as of June 30, 2025.

(d)  Senior Loans, Collateralized Loan Obligations and Corporate Bonds exempt from registration under Rule 144A, which as of June 30, 2025 represented 143.7% of the Fund's net assets or 89.9% of the Fund's total assets, are subject to legal restrictions on sales.

(e)  This loan or a portion of this loan represents an unsettled loan purchase. The interest rate will be determined at the time of settlement and will be based upon a spread plus the applicable reference rate determined at the time of purchase.

(f)  Investments whose values were determined using significant unobservable inputs (Level 3) (See Note 4 of the Notes to Financial Statements).

(g)  When-Issued or delayed delivery security based on typical market settlement convention for such security.

(h)  As of June 30, 2025, the Fund had entered into the following commitment to fund a revolving senior secured loan. Such commitment is subject to the satisfaction of certain conditions set forth in the documents governing this loan and there can be no assurance that such conditions will be satisfied. See Note 2 of the Notes to Financial Statements for further information on revolving loan commitments.

Unfunded Issuer				Total revolving and delayed draw loan commitments				Less: drawn commitments				Total undrawn commitments
Databricks, Inc.				$	902			$	—			$	902
Ivanti Security Holdings, LLC					250				—				250
Kaman Corp.					215				—				215
Total				$	1,367			$	—			$	1,367

  As of June 30, 2025, the aggregate cost of securities for Federal income tax purposes was $558,985.
Unrealized appreciation and depreciation on investments for Federal income tax purposes are as follows:

Gross unrealized appreciation				$	9,332
Gross unrealized depreciation					(11,887	)
Net unrealized depreciation				$	(2,555	)

Currencies:

£  British Pounds

€  Euro Currency

$  U.S. Dollars

Abbreviations:

144A  Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

CLO  Collateralized Loan Obligation

CMT  Constant Maturity Treasury